Crude extends gains

Prices cross $78 mark for first time in December

Crude prices shot up considerably higher once again on Thursday, 24 December 2009. Prices continued to rise as energy department reported a more than expected drop in crude supplies for last week a day before. Prices also rose as the dollar fell following couple of economic data.

On Thursday, crude-oil futures for light sweet crude for February delivery closed at $78.05/barrel (higher by $1.38 or 1.8%). Prices crossed $78 mark for the first time in December. Earlier during the day, it fell to a low of $76.17. For the week, crude ended higher by 4.9%.

Crude ended month of November, higher by 0.4%. It reached a high of $82 earlier in October this year.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 44% since then.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.1%. The dollar was weak against most of its counterparts following better than expected economic data.

The Labor Department in US reported on Thursday, 24 December, 2009 that the first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended 19 December, 2009, hitting the lowest level since September 2008. The figure was lower than expectation.

EIA reported earlier during the week that crude inventories fell 4.9 million barrels in the week ended 18 December 2009. The EIA also reported that gasoline inventories fell 900,000 barrels, and distillate stockpiles, which include diesel and heating oil, fell by 3.1 million barrels. Market was expecting a drop of 2 million and 1.3 million of crude and gasoline inventories respectively. Inventories dropped as net crude imports fell 0.8% to 7.68 million barrels a day.

In the latest meet at Angola yesterday, members of the OPEC oil cartel decided to make no changes to current production quotas. The decision was in line with market expectations. In keeping its quotas unchanged, OPEC cited "shrinking industrial production, low private consumption and high unemployment" in the global economy.

Among other energy products on Thursday, January gasoline added 0.8% to $1.9820 a gallon, January heating oil rose 1.2% to $2.0356 a gallon.

Also on Thursday, January natural gas lost 2.9% to $5.655 per million British thermal units

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

Future exchanges were closed on Friday, 25 December 2009 due to Christmas Day holiday.